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Opening The Cloud: Marten Mickos, CEO of Eucalyptus Systems

I recently spoke with Marten Mickos, the former CEO of MySQL and current CEO of Eucalyptus Systems, the leader in private cloud platforms. Eucalyptus’ underlying technology was developed at UC Santa Barbara. Since its origin as an academic research project in 2007, Eucalyptus has become the dominant open source cloud solution, boasting over 25,000 clouds formed.

According to Marten, “We enable companies to run, within their own firewall, a cloud that behaves exactly like the public clouds, exactly like Amazon. So there is benefit of a running a cloud in-house, you have your own servers but you get full elasticity and you can shift workloads between your various applications.”

Although Eucalyptus is still a relatively small company from a personnel standpoint, it already counts twenty one of the Fortune 100 as it customers. Many of these enterprises utilize Eucalyptus to allow them to operate a hybrid cloud, with some data running on a public cloud (such as Amazon or Rackspace) while more sensitive data is managed within a private cloud. As Marten notes,“The basic need that they all have is unpredictable and variable workloads. The most typical use case is a scalable web service. A good example is the shoemaker Puma. They run all their websites on Eucalyptus. They have a number of mini-websites that they run for various products and campaigns and they cannot know which of those sites will need resources at any given point. With Eucalyptus, they are capable of switching over resources where they are needed the most.”

Eucalyptus recently launched its third generation of its enterprise solution, aptly named “Eucalyptus 3.” Marten considers the primary advancement of the company’s latest release to be its embedded high availability. “With generation three of Eucalyptus, we are adding high availability into the actual product. You have always been able to run HA (high available) applications on top of Eucalyptus, but now the cloud platform itself is actually HA.”

In addition to heading up Eucalyptus, Marten is also on friendly terms with fellow-cloud company, RightScale. To the casual observer, it may appear that Eucalyptus and RightScale’s respective solutions are competitive. However, as Marten makes clear, the companies are actually complementary, “RightScale is one of our closest partners and it makes perfect sense to use the two products together. We are the cloud platform, so we form the cloud for you. RightScale is the management tool of the cloud. The benefit of RightScale is that you can manage many different clouds. You can manage across AWS (Amazon Web Services) and Eucalyptus, for instance.”

As evidenced by his tremendous success at MySQL, Marten clearly appreciates the value created by leveraging an open-source community. At Eucalyptus, a belief in the power endemic in an open source approach is one of the company’s core principles. Per Marten,“We simply believe that open source is a superior way of producing software. You get higher quality software, faster. We also believe, as we did at MySQL, that it is important to have a business model that revolves around the open source product so that you can fund the further development of the product. We are trying to bridge those two worlds, which isn’t completely easy, because many of the open source principles put restrictions on what kind of business you (can) build.”

Although it can be challenging to meet the demands of an open source business model, the benefits are also tremendous, especially in the area of partnerships. As Marten points out, “Many software partners integrate with our product without even telling us. We don’t need to reach out to them to ask them to integrate. They just grab the product. They read the documentation. The code is open, the APIs are open…we see that all over the world and it creates a strong ecosystem of adjacent, value-adding products that run on top of Eucalyptus or with Eucalyptus, enhancing the overall experience for the customer.”

Marten also offers some grounded advice for emerging entrepreneurs interested in starting a venture within the cloud ecosystem. Like most rapidly growing tech sectors, cloud computing has experienced its share of hype and hyperbole. Marten cautions entrepreneurs to avoid being lost in the current cloud mania, “If you are going to build a really successful company in the cloud (space), you should not give it a name with cloud in the name or some Latin name of clouds. Over time…there are too many companies that have similar names and it gets confusing. To name your company after the industry you are in…can turn into a banality and it doesn’t give the right impression. Find some other name than cloud something.”

Although cloud computing is still in its infancy, Eucalyptus’ combination of world-class technology, top-tier management and robust open source community will guarantee the company a prominent role in shaping the industry for the foreseeable future.

Note: I am a very small investor in RightScale and Eucalyptus (emphasis on very), as disclosed in my bio.

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.